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Investing.com - Cantor Fitzgerald maintained its Neutral rating and $55.00 price target on ON Semiconductor (NASDAQ:ON), a $21.9 billion semiconductor manufacturer trading at a P/E ratio of 35.15, in a research note issued Tuesday. According to InvestingPro analysis, the stock appears slightly undervalued based on its Fair Value estimate.
The firm cited several gross margin tailwinds expected for ON Semiconductor following what it described as a second-quarter bottom. These positive factors include a decline in underutilization charges, removal of EFK headwinds, depreciation reduction, and positive mix effects. The company currently maintains a gross margin of 39.85%, according to recent financial data.
Cantor Fitzgerald projects these combined factors will create "a nice GM expansion story" over the next 18 months for the semiconductor manufacturer. The firm’s analysis suggests this expansion could support a near-term trade opportunity.
Despite these positive developments, the research note highlighted offsetting concerns. Cantor Fitzgerald models ON Semiconductor’s gross margins exiting calendar year 2026 at approximately 20 percentage points below the industry group average and "still well below the company’s target levels." For deeper insights into ON Semiconductor’s financial metrics and growth potential, InvestingPro subscribers can access comprehensive analysis and 14 additional ProTips.
Additional factors tempering the firm’s outlook include ON Semiconductor’s lower absolute margin levels, overexposure to the automotive sector, and potential pricing headwinds that could limit gross margin upside. The note specifically mentioned that ON Semiconductor’s gross margins "saw the greatest expansion through the COVID period." Despite these challenges, the company maintains a "GOOD" overall financial health score of 2.51 out of 5, according to InvestingPro metrics.
In other recent news, VEON Ltd (AS:VON). released its unaudited interim condensed consolidated financial statements for the first quarter of 2025. The telecommunications company filed the report with the U.S. Securities and Exchange Commission, providing investors with updated information on its financial performance. Meanwhile, Medirom Healthcare Technologies Inc. approved the issuance of new stock options under its 2024 Equity Incentive Compensation Plan. These options will be exercisable from July 2026, contingent on certain revenue conditions being met. Additionally, ON Semiconductor has seen varied analyst actions recently. Mizuho (NYSE:MFG) raised its price target to $72.00, maintaining an Outperform rating, citing strong positioning in automotive markets and industrial growth opportunities. However, Cantor Fitzgerald initiated coverage with a neutral rating and a $55.00 price target, expressing concerns about the company’s exposure to the automotive sector. Lastly, MINISO Group Holding Limited submitted multiple disclosure returns to the SEC, reporting changes in its issued share capital. These filings ensure transparency regarding the company’s capital structure adjustments.
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